First National Bank v. United States

I am unable to agree with the majority opinion in this case. What the act requires to entitle a taxpayer to a deduction for a bad debt is (1) ascertainment of worthlessness, and (2) affirmative evidence in its books or records, if it kept any, that it had ascertained in the taxable year that the debts were worthless. The act does not require that the debt be charged off on the taxpayer’s boohs of accoum>t; it merely requires that they “be charged off”.

Here we have a minute o.f the taxpayer’s supreme governing body resolving that the debts “be' charged off.” This minute appears in the…